2023 Market Conditions

As the market continues to face uncertain economic conditions, areas of ongoing volatility, according to Risk Strategies, include:

• Inflation and rising interest rates led to uncertainty about future prices.
• Per NOAA, there were 18 U.S. weather/climate disaster events in 2022, with losses exceeding $1 billion each.
• Ransomware and cyberattacks continue to grow. Approximately 80% of attacks result from human error.
• Higher claims costs from escalating verdicts and rapidly evolving environmental, social and governmental (ESG) conditions affect individuals and businesses.
• Employers are spending more on compensation and benefits to counter continued challenges in attracting and retaining talent.
• War, in addition to being a humanitarian crisis, is affecting supply chains and consumers worldwide, and adding uncertainty about future policies and regulations.

Insurance Conditions

Despite the volatility and uncertainty, the unemployment rate is at a 53-year low, inflation is beginning to ease, supply chain issues are being resolved and generally, there is a return to more “normal” business conditions.

Specific to insurance:

• There are signs of optimism as rates moderate in casualty, management liability and cyber. Businesses with a good risk profile will have a competitive advantage.
• Conversely, property rates, particularly in Florida and California, are increasing while capacity and coverages are limited. Other catastrophe-exposed areas are not immune.

Insurance carriers remain disciplined and are looking to manage capacity, control terms and conditions, and adequately price risks. When considering where to utilize precious capital, carriers seek additional underwriting and detail and closely scrutinize risk control measures and the client’s focus and commitment to risk management.

Source: Risk Strategies 2023 State of the Market Report. To view the full report, visit https://www.risk-strategies.com/2023-state-of-the-market.